Disruption ahead: Technology’s impact on shipping industry

In an exclusive interview with SAFETY4SEA, Mr. Arun Sharma, Executive Chairman of Indian Register of Shipping (IRClass), who will be assuming his role as Chair of IACS for 2019, refers to the latest cyber security and digitalization initiatives that IRClass has taken as well as to the global trends concerning shipping market.

SAFETY4SEA: In today’s rapidly changing business environment, it is essential that companies digitally transform to stay competitive. In your view, do you think that the maritime industry is lagging behind others – and if so, what are the reasons?

Arun Sharma: The maritime industry has entered the era of digital transformation later than other sectors, but with cautious optimism towards a better shipping ecosystem. Change is now being embedded at a commendably fast pace where we are witnessing a relatively quick uptake and smooth implementation of modern technologies which are expected to raise safety standards and improve the industry’s level of efficiency, without harming the environment.

S4S: Which are currently the trends affecting the global shipping market and what will be the key challenges within the next years?

A.Sh.: With the sophistication of technology, we foresee:

Consolidation likely to continue – not just in the classification society arena but in other sectors within the industry as well. The creation of bigger and smarter ships that we are seeing today, for example, could potentially put smaller classification societies at risk of being inadequately capable of servicing these larger vessels due to their limited resources and expertise in IT and research, and therefore seek to form alliances with other classification societies.

More facets of intelligent shipping will be introduced within the next years – using transformative technologies including blockchain and artificial intelligence (AI) to revolutionise operations and processes in shipping, thereby augmenting the human element. And to do so would require a digitally-savvy workforce or an upskilling of the existing workforce.

S4S: How will the Fourth Industrial Revolution affect the industry and how could we prepare for?

With these technologies, we can expect business efficiency to increase drastically as:

Surveys/inspections will be conducted by drones, assisted by augmented reality (AR)

Geo-spatial technology / AR optimising existing infrastructure

Whilst these new technologies will continue to transform computing into hyper-connected systems that integrate human, physical and digital environments, there are potential associated risks such as the difficulty to integrate and regulate these technologies to all applicable markets in the maritime industry.

S4S: What sort of innovations do you think that will top the list and shape the things to come?

A.Sh.:

More software-controlled ship systems will be created to automate tasks/processes for the purpose of improving efficiency levels.

Use of blockchain to implement smart contracts could mean greater efficiency with the elimination of intermediaries, high accuracy and increased transparency.

Condition-based monitoring is likely to be more prevalent (not necessarily replacing traditional five-yearly surveys) as it is especially useful in detecting early warning signs – derived from real-time vessel performance data, and also helps to make surveys less disruptive.

But with the technological element underlying its operation, evaluating the reliability of the security infrastructure is an essential step to take prior to adoption.

S4S: Where do you see the role of classification societies in the current maritime digital transformation?

A.Sh.: With new technologies and increasing adoption of software-controlled systems comes new threats to the shipping landscape – including hacking and other cyber-related issues.The role of classification societies today would then expand to include guiding the maritime community on managing/tackling these issues, ensuring damage is kept to its minimum, without steering away from its core role of ensuring safety at sea and protection of the environment.

S4S: Can you tell us how IRClass is aiding this transformation? Can you see your organization’s current business model in a new, technologically advanced, futuristic shipping industry?

A.Sh.: With the maritime industry becoming increasingly-connected and digitalized, IRClass recognises the importance of tackling cyber-related issues including cyber safety and security, and has come up with the following initiatives:

Guidelines on Cyber Safety

Cyber security is fast evolving into a major concern for the maritime industry.

To prepare the industry for the perils of cyber, IRClass has developed Guidelines addressing cyber safety onboard vessels, as well as separate Guidelines to address cyber safety of land installation based on international standards.

Cyber Risk Management Training

With the introduction of threats associated to digitalization, comes the need to strengthen cyber security. IRClass conducts training for shipping personnel to:

Tackle issues specific to information and operational systems

Increase awareness of external and internal threats, risks as well as vulnerabilities

Improve design and implementation aspects in new facilities and existing installations

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Having these initiatives implemented establishes the dynamics of the digital ecosystem in a changing shipping landscape, and with heightened awareness, the maritime community are less likely to be vulnerable to cyber-attacks.

S4S: Looking ahead, what would be your top priorities on IACS agenda taking the helm as Chairman from 2019?

A.Sh.: The maritime industry is going through a technological and regulatory upheaval. The new regulations are increasingly challenging the industry players to bring about a marked change in the way the industry operates. The maritime sector looks up to IACS to provide the technical leadership to use technological innovations for driving efficiency and to support and facilitate compliance with the upcoming regulations. One finds today that various industry players are coming up with their own solutions through tie-ups, collaborations with tech firms. This could result into multiple platforms with multiple solutions being offered which may eventually lead to lack of standardisation. I therefore believe that there is a need to have industry-wide standards to address these new challenges and IACS is probably better suited to use its collective knowledge and expertise to bring about universal standards to benefit the industry.

The views expressed in this article are solely those of the authors and do not necessarily represent those of SAFETY4SEA and are for information sharing and discussion purposes only.

About Arun Sharma

A Marine Engineer by profession, he graduated from a Marine Engineering college in 1969 and joined The Shipping Corporation of India as a sea going engineer, moving to shore establishment of SCI in 1978. He served with SCI until 1992 and his last post was as Deputy General Manager, heading the Gas Carrier and Chemical Carrier Department.

In a long and varied career in Indian shipping, he was also Vice President – Commercial and Operations with Varun Shipping Company between 1993 and 1999 and was appointed President of Great Eastern Shipping between 2000 and 2006. He was then appointed President and CEO, India Steamship, Kolkata in March 2006.

He has served on the board of Indian National Shipowners’ Association and on the Asia Committees of Lloyds Register of Shipping, American Bureau of Shipping and Det Norske Veritas. He is currently Vice Chair of International Association of Classification Societies (IACS).